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2013 (12) TMI 396 - AT - Central ExciseInterest on delayed payment of cess u/s 11 (a)(b) of Central Excise Act 1944 Held that - Following OIL & NATURAL GAS CORPN. LTD. Versus C. C. & C. E., VISAKHAPATNAM-II 2009 (4) TMI 814 - CESTAT BANGALORE - there is no provision in the OID Act, 1974 for demand of interest for delayed payment of Cess - Interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf -the provision relating to interest in the latter part of Section 9(2) can be employed by the Stales sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent - There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax, the States sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest. The provisions of Section 15 of the OID Act and noted that the said section does not contemplate for levy of any interest for delayed payment on oil cess - Interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf - the provisions of the OID Act do not contain any provision for levy of interest on delayed payments of cess - Interest on the delayed payment of cess under Oil Industry (development) Act, 1974 cannot be demanded under the provisions of Central Excise Act and Rules made there under - order unsustainable and set aside Decided in favour of Assessee.
Issues involved:
Payment of interest on delayed payment of cess imposed under the Oil Industry (Development) Act, 1974. Analysis: The issue in this case revolves around the liability of the appellant to pay interest for delayed payment of cess under the provisions of the Central Excise Act, 1944. Both lower authorities had held the appellant liable for interest payment. However, the appellant cited the judgment of the tribunal in the case of ONGC Ltd., which stated that interest cannot be charged under the Central Excise Act for delayed cess payment. Additionally, a judgment of the Hon'ble High Court of Andhra Pradesh supported this view, stating that interest cannot be demanded under the Central Excise Act, 1944 or its rules. The tribunal, after considering submissions and relevant orders, found that the OID Act, 1974 does not provide for the demand of interest for delayed cess payment. The tribunal referenced the provisions of Section 15 of the OID Act and concluded that interest cannot be levied on delayed payment of oil cess. Therefore, the tribunal held that the confirmation of interest payable by the appellant was not sustainable and allowed the appeal with consequential relief. The tribunal's decision was further supported by a judgment of the Hon'ble High Court of Andhra Pradesh, which emphasized that interest can only be levied on delayed tax payments if the statute specifically provides for it. Since the OID Act does not contain provisions for levying interest on delayed cess payments, the court held that the authorities cannot demand interest on such delayed payments. The court also noted that while amendments were made to the Central Excise Act in 1995 regarding interest charges, no corresponding amendment was made in the OID Act. Therefore, the court held that the provisions of the Central Excise Act regarding interest charges cannot be invoked for charging interest on delayed cess payments. The court affirmed that interest on delayed payment of cess under the OID Act cannot be demanded under the Central Excise Act and its rules. In conclusion, based on the judicial pronouncements from both the tribunal and the Hon'ble High Court of Andhra Pradesh, it is established that interest on delayed payment of cess under the Oil Industry (Development) Act, 1974 cannot be demanded under the provisions of the Central Excise Act and its rules. The impugned order was deemed unsustainable and was set aside, leading to the allowance of the appeal.
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